{"id":11405,"date":"2023-08-01T02:09:11","date_gmt":"2023-07-31T20:39:11","guid":{"rendered":"https:\/\/aayushbhaskar.com\/?p=11405"},"modified":"2023-08-06T12:14:32","modified_gmt":"2023-08-06T06:44:32","slug":"how-to-value-a-company-before-ipo","status":"publish","type":"post","link":"https:\/\/aayushbhaskar.com\/how-to-value-a-company-before-ipo\/","title":{"rendered":"How To Logically Value A Company Before IPO As An Investor","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"
<\/p>\n
You have seen many private startups go public through IPOs.<\/p>\n
However, the company valuation, when the entity is yet to go public, could be a tricky situation. Since the company is not listed, one can not get an idea of the company’s worth, as share price in conjunction with total equity share with the public is often used as a tool to assess the company’s actual worth.<\/p>\n
There are a few quantitative methods that help investors to assess the value of businesses better. The more operating years a company has had, the more accurate will be the quantitative indicators.<\/p>\n
The incubators’ vision, their understanding of the investors’ concerns, and their ability to chart a future course for the company are all important factors.<\/p>\n
More often than not, companies overvalue themselves whilst going public because of several reasons (which will be discussed in the later part of this article).<\/p>\n
The enthusiastic investors are baited into buying overpriced IPOs, and thus they set themselves up to face the brunt of the stock market<\/a> and incur huge financial losses in the future.<\/p>\n